What is Contract Coercion?

Contract coercion occurs when a contract agreement is entered into under conditions involving harm or threats of harm. State and federal laws require contracts to be entered into "knowingly" and "willingly" by all parties. Thus, if a party signs a contract due to coercion, the contract generally will not be considered legally enforceable.

The rule regarding coercion applies both to the entire contract as well as individual terms in the contract. That is, the parties must willingly agree to the contract as a whole, as well as the various terms, definitions, and requirements laid out individually in the agreement.

What is the Effect of Coercion on a Contract?

If conditions of coercion are found, the effect on the contract is usually that the entire contract is rescinded or cancelled. Contract rescission has the effect of canceling the agreement in its entirety. This will release both parties from their obligation to perform any contract duties as contained in the agreement.

Are there Defenses to Contract Coercion?

A common defense to contract coercion is "unclean hands". This is found when one party avoids liability because the other party is guilty of doing the same thing. Here, unclean hands would mean that both parties actually coerced the other into signing the agreement. In such situations, the contract would still be voided due to the existence of coercion. However, an unclean hands defense might help one party avoid certain liabilities or legal remedies.

Also, contract coercion may be raised as a defense against performing contract duties. For instance, one party might claim that they don’t need to perform their contract duties because they were coerced into performing the contract. Thus, coercion is often itself used as a contract defense.

Do I Need a Lawyer to Help Resolve Contract Coercion Issues?

Contract laws under state and federal standards can be very strict. You may wish to hire a lawyer if you believe that coercion may have been at play when you signed a contract. Your attorney will be able to help you by providing valuable legal advice and guidance on your case. Also, your lawyer can be on hand during court appearances to provide you with representation and assistance during the actual trial.